Observations focused on the problems of an underdeveloped country, Venezuela, with some serendipity about the world (orchids, techs, science, investments, politics) at large. A famous Venezuelan, Juan Pablo Perez Alfonzo, referred to oil as the devil's excrement. For countries, easy wealth appears indeed to be the sure path to failure. Venezuela might be a clear example of that.

Archive for May, 2016

It was only a matter of time, but the Hyperinflated Arepa Index crossed the factor of ten increase in price with ease, as this week I went and had another delicious arepa at my favorite joint and I paid a price of Bs. 1,400 for my queso de mano arepa. This whole story began on Nov. 17th. 2014, at a price of Bs. 120. It took one year six months and four days for the price to increase by a factor of ten. This represents a 27% increase since the last report on April 9th. and a 409% increase since twelve months ago. The price has increase 1066% since I started logging it.

Of course, the increase is actually higher because as I reported last time, there has been a bit of Soviet style inflation, with the arepas getting smaller. Above I post a picture taken on Nov. 15th. 2015 and the arepa I ate this week. I don’t know if the plates are the same size, but you can easily see that the filling is much less generous now. On the top one there are four generous slabs of queso de mano, on the botttom one there are three not so generous ones. The arepas to me are clearly smaller (I suspect the plate on the right is bigger, but I wonder about how the paper around the arepa seems to be the same size)

Maduro with some of the soldiers during the military exercise and the Minister for Feeding, the Vice-President and the Minister of Industry and Commerce participate, some of them dressed in full military dress, even if they were never part of the Armed Forces.

As Maduro and some of his Minister participated this week in “military excercise” which mobilized half a million soldiers and civil militia members, at an estimated cost of US$ 20-30 million, you have to wonder what is going through these people’s minds. While they spend money on this to make a show of force against a possible foreign invasion, the health crisis Venezuela is experiencing is something unheard of in the modern world.

And what is needed is resources, the same resources being used in these military exercizes and military equipment.

Wasn’t the revolution all about the “people”. Well, the people are dying and will feel the effect of lacks of medicines for a long time.

While we have all heard the calls for medicine xx or yy in Twitter or Facebook, what needs to be understood is that this is not only a crisis today, but something which will have an impact on the health of Venezuelans for years to come. The people above in the pictures, wasting their time and Venezuela’s money are not only ignoring those that die everyday due to the lack of medicines, but they are also sentencing many others to die in the future, due to the absence of the most basic medicines for health problems that can be easily controlled or managed.

These same people, are making daily decisions in Venezuela about which pharmaceutical companies can get limited foreign currency, which are based on their own ill conceived plans for the the development of the Venezuelan economy.

Today, Venezuelans find that even the most basic antibiotics can not be found. Why? Because it is not only that the foreign currency approved is limited, but that there is no health management concept involved in deciding which products get or not foreign currency.

Any rational plan would be based on guaranteeing the basic or essential medicines contained the the lists elaborated by the World Health Organization both for adults and children that can be found here. A lot of experience and thinking has gone into these lists, which are constantly being updated and modified. These are the most basic list of such essential products. However, as you peruse the list, you realize that you know for a fact that you have seen and checked reports that many of them are missing from Venezuela’s drugstores.

Take simple things, like disinfectants and antiseptics. There are a number of them which are only found in insufficient quantities thesedays, such that hospitals have to shut down areas and operating rooms, because there is no way to guarantee that patients can be held in these areas without disinfecting them first. This implies that operations are postponed, patients sent home and people simply die, because simple procedures that will prolong their life can not be provided safely.

Sometimes, not even the reagents needed to perform simple blood tests can be found and patients are turned away even before they can tell why it is they are not feeling well. Sometimes they have to wait weeks before they can have what is considered a simple exam in most, if not all, countries of the world.

And you may ask why if there is such a list, the Maduro Government does not use it? Simple, in the world of Chavismo, which ignores all knowledge and in which non-experts are put in charge of these complex problems, whether you get or not foreign currency has exclusively been determined by two factors in recent months 1) Are you importing raw materials to make the medicines or products in Venezuela? and 2) What products have significant shortages at this moment?

The problem with this criteria, is that not all medicines are produced in Venezuela. Thus, if for example, you ask to import the basic component of a drug against hypertension, which is basically all the final medicine contains, then you don’t get the foreign currency. Problem is, most modern drugs against hypertension are not produced in Venezuela. The result is that, for example, the pharmaceutical I use, has not been available in the country since March 2015, about 14 months ago.

Same with antibiotics. Some antibiotics are produced in Venezuela, but they tend to be old ones that people have developed resistance against, so, yes, you can buy antibiotics, but not necessarily those that may be needed for the particular infection you have.

Ironically, blood and blood plasma products, which used to be produced by Government run Quimbiotec, have not been produced since this plant was shut down last year, as the political battle for control of the plant destroyed the technical capabilities it had. Even in Aporrea, Chavistas call this a national shame, as these products are needed today more than ever due to the presence of Zika and the related Guillian Barre syndrome.

Thus, policies are simply determined using a misguided project for the manufacture of medicines and pharmaceuticals in Venezuela. And in the middle of the implementation of this, the Government discovers something is critically absent and then it stops approving foreign currency for all products, except for one particular sector. For example, last month, I am told the Government only approved foreign currency for manufacturers of contraceptives, which have been absent from drugstores for quite a few months. (Another LONG LASTING effect in the works!)

This haphazard way of doing things is not only killing people today, but will have long lasting effects over the Venezuelan population. As an example, take the same case of medicines against hypertension. Once you start taking one, you are supposed to never stop. Your cardiovascular system will cycle back to high blood pressure and you may have problems. Well, thousands of Venezuelans have had to reduce their dose or simply stop taking these products.

And there are many cases like this.

Thus, the Venezuelan health crisis will be long lasting. It is not only a matter of the damage it is doing today to those getting sick but are unable to do anything about it, but also the damage to those that were taking substances that controlled their illnesses, but can no longer do it.

The crime committed by these people, goes beyond wasting money in useless military exercises that seem more like a parody, but also in making it difficult for humanitarian aid to arrive in the country. While it has not refused yet any aid, none of it has supposedly reached the country because of all of the permits required. This is all done under the excuse that there is no humanitarian crisis to speak of.

When this nightmare is over, if ever, epidemiologists will come to Venezuela to study the effects of withdrawing modern medicine on the population for a certain period of time and see what can be learned from the irresponsible and criminal policies of Chavismo.

Playing hide and seek during military maneuvers. Hope the guys is not allergic, there are no antihistamines either.

Today, we have a copy of the decree issued by President Maduro to give him extraordinary powers, which now needs to be ratified by both the National Assembly and the Venezuelan Supreme Court. The Assembly will obviously not approve it and the Supreme Court will and then will likely say the Assembly does not have to approve it.

But the decree is a beauty in its Supra Constitutionality. It simply deletes and does away with significant parts of the Venezuelan Constitution, including taking away powers from the National Assembly which are in the Constitution.

Pretty, it certainly ain’t.

And in some sense it is ironic that the decree contemplates that the National Assembly has to approve it, as it is quite obvious it will not. Approving it will be emasculating the powers of the Assembly, a sort of Hara Kiri for the majority that the opposition obtained in the December vote.

Let’s look at some of the details, not before reminding you that I am far from being a lawyer and I will try to be as precise as I can, within that limitation.

I will skip most of the introduction, which argues that ever since Chávez died, there has been this conspiracy between the local “right wing”, which I assume is all of the opposition and mysterious international forces to distort the Venezuelan economy. In some sense, the decree argues that all of the opposition is part of this and thus, it needs to be neutralized and its rights limited.

Way to neutralize over half the population!

In Art. 1 the decree gives the Government the power to adopt measures to insure the population can “enjoy” its rights, to preserve internal order, to have access to goods and services and magically, to diminish the effects of natural events (a.k.a El Niño) that have affected power generation, access to food (??) and other products essential for life.

And then we come to the all powerful Art. 2., which says too much, among many:

1.- The Government can adopt measures to insure the production, distribution of goods and “combat” distortive economic conducts, like “bachaqueo”, hoarding, usury, fraudulent alteration of prices and other (undefined!) economic illegalities.

3.-To guarantee, even with the intervention of the Armed Forces for the correct distribution of food and essentials.

Scary article to say the least! (What does correct mean?)

4.-The authorization by the President and the Cabinet to spend money from the Treasury and other sources of financing not contemplated in the Budget Law to optimize resources.(Read: To bypass the National Assembly and the Constitution in the process, issue debt and spend money)

5.-To approve and subscribe contracts to obtain resources without the need to have it approved by other powers (i.e.: Bypassing the National Assembly and the Constitution)

6.-To allow the direct assigning of foreign currency…for the purchase of priority goods.

Cadivi corruption on steriods?

7.-To decide to suspend the political sanctions against the authorities when these sanctions can become an obstacle…i.e. remove the power of the National Assembly to censor and remove Ministers and the Vice-President, as established in the Constitution.

8.-18.- More of the same

From which we jump to lovely Art. 4: The Finance Ministry will be able to coordinate to establish minimum and maximum limits for the incoming and outgoing of Venezuelan cash (Bs.), as well as restricting certain commercial and financial transactions, restricting such operations to the use of electronic means available in the country legally. (Corralito anyone?)

And after all this, the decree says the Supreme Court and the National Assembly will have to approve the decree…

Go figure…

But the objective is clear, parts of the Constitution are decreed void, The National Assembly is restricted in its powers, including many granted by the Constitution and an extremely powerful Government, becomes even more powerful to do what it wants.

Last Friday, President Maduro announced that he would extend the economic emergency powers decree (The same one that the National Assembly did not approve, but the Supreme Court said it did not matter) and announced that he would also decree a state of exception to “neutralize and defeat the external aggression against our country”

Now, you would think that given the importance of such a decree, the Government would have distributed a copy by now, but, no such luck, the details of the decree are unknown. Maduro will apparently issue it taking advantage of the Supreme Court’s ruling on the prior economic power decree, in which the “High” Court simply scratched part of the Constitution (Art. 339 of the Constitution, for example) saying the Assembly did not have to approve the decree.

Some people are calling this a “coup”. I disagree. You can’t have a coup when you already staged one. I can’t even recall when this happened and one could argue when it was. It may have been when Chávez was never sworn in in Jan. 2013, as Chavismo suggested this was simply a “formality”. Or it may have been when Maduro took over from Chávez for the new term, despite the fact that the VP is named by the President and there is no proof that Chávez was even conscious at the time. Or it may have been when the Supreme Court twisted and violated the Constitution dozens of time, just to have the Government get its way.

So many coups and nobody has been counting them, but this was not it!

And the funny thing is that just last week, the Venezuelan Foreign Minister went to the UN to say there was no crisis in Venezuela, no emergency. Funny, no? the President not only extends the economic emergency decree, but also expands it to include a state of emergency.

And it just so happens that during a state of emergency, there can be no public gatherings like those the opposition has been promoting to protest the recurrent delays in the processing of the request for a recall referendum vote against none other than President Nicolas Maduro. Each step of the process has been delayed, over-interpreted and postponed, using vaporous interpretations by the Government-controlled Electoral Board. Which, of course has everything to do with trying to delay a recall vote until after Jan. 10th. 2017, when if Maduro is recalled, his personally-chosen active Vice-President would replace him and complete his term until Jan. 2019.

And thus, the threat is not from the outside, as Maduro wants you or someone to believe, but from the inside: the fear that the opposition will increasingly take to the streets to force a recall vote before the fateful date of Jan. 10th. 2017.

Thus, the guessing game begins as to who the VP will be in January. Opposition lore will have it be current VP Aristobulo Isturiz, “someone we can talk to”. Forget it! Aristobulo does not have the red credentials, nor the trust of Chavismo, precisely because the opposition can talk to him. It will likely be someone who is in the Cabinet, someone Maduro trusts. Perhaps Marco Torre, a loyal former military a perennial Cabinet member. Perhaps better a civilian, Jorge Rodriguez, loyal to Chávez and Nicolas. But who knows? There is still a lot of time before January and maybe not enough people will show up for a recall after that date*.

Stay tuned.

*Maybe I placed too much emphasis on who will replace him, but the more I think about it, the more I believe that there will not be much motivation to change Maduro for someone else. Remember that the opposition needs to get more votes to recall than Maduro got in his Presidential election.

For once, it feels good to report some reasonably good news, as the Puerto Cabello Non-Baltic Index has been showing some strength for the first time since early March. In fact, there had been no reading of nine ships in port since March 4th., two months ago. The increase has been sustained and I have seen daily changes, but I try to obtain a value at the same time each day (right after sunset). I did miss some days, as I have been traveling.

Despite that we are still below last year’s levels, which simply proves that the country’ foreign Minister lied outright at the United Nations when she claimed Venezuela was importing food for three countries. How these “revolutionaries” can say these things with a straight face is beyond me.

Hopefully, these new arrivals imply some improvement in the availability of food in the upcoming weeks for Venezuelans.